The formation of a coalition government in Austria that includes the rightwing Freedom Party headed by Mr. Joerg Haider is a potential nightmare for Europe. The prospect of an extremist party joining the Cabinet in Vienna has forced other members of the European Union to examine their own past. It has been a wrenching experience -- and one not without some measure of hypocrisy for nations who profess to value democracy. This could prove to be a defining moment for the EU, as it tries to identify the threads that bind the community. The EU could be embarrassed if it is ignored, however.

In elections last year, the Freedom Party placed second behind the Social Democrats. That party refused to form a coalition with Mr. Haider. But after the Social Democrats failed to draw up a Cabinet with their old partners, the People's Party, a conservative group, the two rightist parties formed their own coalition. Reluctantly, Austrian President Thomas Klestil swore in the new government, including six ministers from the Freedom Party, late last week.

That jolted Europe. Governments throughout the EU fear that the legitimacy given to Mr. Haider -- who has praised the Third Reich's "orderly employment policies" and the Waffen SS -- could invigorate like-minded politicians across the continent. Fears of a revival of fascism and racism were not diminished by the fact that Mr. Wolfgang Schuessel, head of the People's Party and a respected foreign minister, would be chancellor. Mr. Haider's promise to stay out of the Cabinet and continue to serve as governor of the province of Carinthia provided little reassurance, given his iron grip on the party.